SWEATSHOPS
Negatively connoted term for any working environment considered to be unacceptably difficult or dangerous • • • • •
Long hours Low pay Child labour Hazardous to health Employee abuse
Origins between 1830- 1850 • A specific type of workshop where a ‘sweater’ directed others in garment making, under arduous conditions. • The term ‘sweater’ and the process ‘sweating system’ for subcontracting piecework. • In 1850s sweatshops the sweater and subcontractor was a key relationship, as it kept workers isolated in small groups unsure of their supply of work and unable to organise themselves.
Garment Production • Garment manufacturing's reliance on human labour helps explain why apparel factories are so often sweatshops. • The softness of the garments and the complicated patterns mean that apparel production doesn’t easily lend itself to mechanisation. For more than 150 years the sewing machine has been the best way of making clothes. • To keep labour costs down, factory owners pay workers ‘piece rate’. Their wage is based on the numbers of items they complete on a shift.
Race to the bottom • Free trade agreements such as NAFTA have given investors new abilities to more production facilities across international borders, with guarantees that governments will not interfere. • Lower tariff rates and the elimination of import quotas make it easier for goods to move internationally. • This allows corporations to move away from organised labour to lower wage and weaker labour areas such as Mexico. • China’s entry into the WTO has led to 300 companies leaving Mexico and setting up in China
Average Hourly Apparel Workers Wages (2004) • • • • • • • • •
Bangladesh hourly wage in US $ China Costa Rica Dominican Rep’ El Salvador Haiti Honduras Nicaragua Vietnam
$0.13 $0.44 $2.38 $1.62 $1.38 $0.49 $1.31 $0.76 $0.26
Companies using sweatshops
• Workers making clothes for Primark and Mothercare in Bangalore were being paid 13p per hour for up to 48 hour weeks. • Workers making clothes for M&S and H&M at India’s largest ready-made garment exproter Gokaldas Export were paid £1.13 for a 9 hour shift. • Workers making clothes for GAP, Matalan and Primark are regularly expected to work between 6 and 18 hours overtime per week. • John Hilary of War on Want said “Exploitation of workers in developing countries such as India is standard practice for British retailers right across the spectrum. This just underlines the urgent need for governments to step in now and stop these abuses.”
Supermarkets
• Supermarkets today wield unprecedented power on a global scale. From Bangladesh to South Africa, supermarkets dictate the terms at which overseas producers are forced to sell their goods. • Despite working 80 hours a week , many workers are not able to earn a living wage. • The likes of Tesco and ASDA look to keep prices low and profits high. ASDA Wal-Mart have resources beyond those of many countries and use these to squeeze every last penny from suppliers.
What should these companies do? • Studies have shown that multinational firms pay more than domestic forms in third world countries. • Many economists recognise that so-called sweatshops much needed third world investment and employment. The Academic Consortium on International Trade (ACIT) led by Jagdish Bhagwati circulated a letter to colleges and universities in the USA urging them to become aware of the downsides to the anti-sweatshop movement • Feenstra and Hanson (1997) found that multi-national firms improved the lives of workers by increasing the demand for labour. • Budd, Konings and Slaughter (2001) found that as multinational firms profits go up, they share gains with third world workers.
Corporate Social Responsibility • A form of self-regulation integrated into a business model. • The business monitors and ensures its active compliance with laws, ethical standards and international norms. • The goal is to embrace responsibility for the company’s actions and encourage a positive impact on all stakeholders and the environment.
Benefits of CSR Means behaving responsibly and dealing with suppliers who do the same • A good reputation makes it easier to recruit employees. • Employees may stay longer, reducing the cost and disruption of recruitment and training. • Employees are better motivated and more productive. • CSR helps to ensure you comply with regulatory requirements • Activities such as involvement with the local community are ideal opportunities to generate positive press coverage. • Good relationships with local authorities make doing business easier. • Understanding the wider impact of your business can help you develop new products and services. • CSR can make you more competitive and reduces the risk of sudden damage to your reputation. Investors recognise this and are more willing to finance you.
Olympic brands caught up in abuse scandal. (www.guardian.co.uk)
• Workers producing sportswear for Olympic sponsors Adidas, Nike and Puma are beaten, verbally abused, underpaid and overworked in Bangladeshi sweatshops.
• Some Adidas workers were paid as little as 9p an hour, the average across all six factories investigated earning just 16p an hour. • One in three had to work more than 80 hoursa week. • Aside from beatings, they said they were sworn at, pushed, forced to undress, humiliated by being made to stand on a table, locked in the toilet or refused permission to use the toilets
Lets investigate • • • • • • •
Nike CSR Better Cotton Initiative (BCI) Adidas sustainability PUMA Vision Sustainability Report M&S Plan A ASDA CSR TESCO CSR